Performance of 50 Completed ATP Projects Status Report - Number 2 NIST SP 950-2 Chapter 3 - Biotechnology
Aastrom Biosciences, Inc. A Patient-Friendly Approach to Human Cell Transplantation

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Serious Drawbacks to Existing Methods
Good as it is, stem cell harvesting has important drawbacks. Harvesting stem cells from bone marrow is painful, usually requiring 100 to 140 needle sticks — performed as major surgery under general anesthesia — to extract from the hip or other large bones enough marrow for successful transplantation. Some cancer patients are not strong enough to withstand so many extractions. A few are so ill they can’t afford to postpone therapy while stem cells are being harvested. Still others suffer significant side effects (pneumonia, pulmonary embolism, bone marrow inflammation) from the extraction process itself. A typical procedure involves eight separate donor visits (one for the extraction, several for blood testing and other medical procedures, one for reinfusion of the stem cells), takes about 16 hours altogether and costs $10,000 to $15,000.

Ex Vivo cell expansion—from lab to the clinic.

Another harvesting method — peripheral blood progenitor cell (PBPC) collection — is in some ways an improvement over traditional bone marrow harvesting. PBPC involves injecting the donor (who might be the patient) with drugs to stimulate the movement of stem cells from the bone marrow into the blood stream. When it becomes enriched with stem cells, the blood is circulated through an apheresis machine, where stem cells are separated, and then back to the donor.

PBPC collection typically involves 21 donor visits (at least one for drug administration, three or four for apheresis, some for blood work, others for follow-up work related to the apheresis, one for reinfusion); takes 39 total hours; requires about 22 needle sticks; and costs around $16,000. It has gained popularity over bone marrow harvesting in recent years, the company reports. This is particularly true for collecting cells from cancer patients themselves, in part because some patients receiving PBPC-based treatment have less need for platelet transfusion.

The overall costs of cancer treatment where stem cell therapy is used may total $100,000 or more. These costs include diagnosis, chemotherapy, radiation therapy, stem cell transplant therapy, and patient management. The costs of stem cell transplant therapy include the costs of cell collection, the costs of reinfusing the cells, and patient support during post-transplant recovery. The latter in-volves hospitalization, antibiotic treatment, infusions of platelets and red blood cells, and management of adverse reactions to large-volume cell infusions.

Injecting Into Processor.

New Approach Promises Large Benefits
A cell expansion system developed by Aastrom Biosciences could potentially mitigate most of the drawbacks associated with current harvesting techniques while reducing costs and increasing the number of patients who could use Aastrom’s procedure. The company was founded in 1989 and had only four persons on staff when it gained ATP support three years later. Wide-scale use of its system would produce large benefits across the economy via new therapies, reduced treatment costs and lower risks to patients undergoing cell harvesting and transplantation.

Aastrom expects cell harvesting via its Aastrom-Replicell™ Cell Production System — which induces cells to rapidly multiply or expand — will be cost competitive. The typical patient/donor is likely to need just two clinic visits, one for harvesting a small amount of bone marrow and the other for reinfusing the expanded cells. An average of just seven needle sticks would be required during the initial visit.

The core technology of the system is a bioreactor that expands small amounts of bone marrow into a transplant product rich in stem cells and progenitor cells (stem cells that have started maturing into blood or immune cells). During a single 20-minute outpatient procedure, less than 50 millimeters of bone marrow is extracted from the patient under local anesthesia. The marrow is injected into a disposable cassette — about the size of a large pizza — which is inserted like a video cassette into the automated bioreactor. A key aspect of the system is the creation of culture conditions that duplicate the human bone marrow environment. The cassette uses growth media, oxygen supplies, and proprietary processes within the bioreactor to stimulate the marrow to produce its own growth factors. Over 12 days, the cell population expands 5 to 10 times while stem and progenitor cells expand even more, producing enough cells for effective transplantation.

Scale-Up and Clinical Trials
Aastrom has successfully scaled up a small laboratory prototype of the cell expansion system to one large enough for clinical use. Clinical research has confirmed that cells produced by this device, called “the System,” can safely be infused into patients.

In the first test of the System, a dose-ranging study with seven lymphoma patients at the University of Michigan Medical Center in 1993, Aastrom found that stem cells generated with its procedure were as safe as those collected by the direct bone-marrow harvesting technique. And in the first feasibility trial of the System — with 10 breast cancer patients at the University of Texas M.D. Anderson Cancer Center in Houston — standard clinical recoveries were seen following injection of the System-produced cells, showing that the System can be operated adequately by clinical personnel.

Another clinical trial, completed in May 1997, reported excellent findings for six breast cancer patients treated through the Bone Marrow Transplant Program at Loyola University Medical Center in Chicago. The study demonstrated that the System technique produced recovery results in line with outcomes for transplantation using other cell harvesting procedures.

Favorable results were also reported at the American Society of Hematology conference in December 1997. A Duke University Medical Center preclinical study showed that the System reduced the number of tumor cells during production. At the same conference, Aastrom announced completion of another Loyola clinical study, this one with 19 patients, that generated further evidence that bone marrow grown in the System retained stem and other key immune cells needed to restore vital tissues after drug and radiation therapy.

Intellectual Property and Stock Market Reaction
Protection of its intellectual property has always been important to Aastrom. The company was founded as a joint effort between the company’s initial investors and the University of Michigan. The investors and the university agreed that inventions by the three principal researchers, all university professors, would be assigned to the university and licensed exclusively to Aastrom.

In March 1992, prior to the ATP award, Aastrom and the university signed a detailed licensing and royalty agreement. Through the end of 1997, 12 patents covered by the agreement had come out of the Aastrom/University of Michigan collaboration. Most of them underlay the ATP-funded technology. News reports about the granting of two of them in September 1997 were immediately followed by a substantial increase in the price of the company’s stock.

The company is also pursuing patent protection for inventions not covered by the agreement with the university. In 1997, Aastrom received in its own name a fundamental patent — “Bioreactor for Mammalian Cell Growth and Maintenance” — for the System method and device. News that this patent had been granted was accompanied by a one-day increase of 60 percent in the company’s stock price.

Aastrom’s policy is to disseminate its findings widely after establishing protections for its intellectual property. This is true of the technical specifics of its discoveries, as well as the results of clinical trials. Company staff have produced numerous papers for presentation at professional conferences or publication in professional journals.

Strategic Alliances for Commercialization
In 1993, the company entered into a strategic alliance with COBE Laboratories and COBE BCT (collectively, COBE) for the worldwide distribution of the System for stem cell therapy and related uses. COBE committed up to $20 million in equity investment in Aastrom. In addition, Aastrom and COBE initiated a clinical trial in France in early 1997 to evaluate the use of System cells to promote the recovery of blood cell production in breast cancer patients undergoing aggressive marrow-damaging chemotherapy. Aastrom is seeking approval to market the System in Europe.

In September 1995, Aastrom entered into a research and development collaboration with Rhone-Poulenc Rorer (RPR), granting RPR a right to license the System for lymphoid cell applications. Under the agreement, RPR will invest $35 million. In September 1997, Aastrom had received $3.5 million in equity payments and $1.5 million in revenues from RPR.

Initial Public Stock Offering
In addition to financial support from strategic alliances, the company has secured funding in the public capital market. In February 1997, Aastrom conducted its initial public stock offering, which raised $21 million, and conducted another offering in December 1997 that raised $11 million.

All equity funding is invested in Aastrom’s research and development (R&D) efforts and administrative activities required to support that research — the only focus of the company’s activities. Thus, as Aastrom succeeded in attracting more private capital, ATP funding constituted a declining proportion of its R&D spending. ATP funds amounted to 23 percent of Aastrom’s $2.6 million R&D budget in 1993 but only 11 percent of its $4.9 million R&D budget in 1994.

Inserting Cell Cassette into Incubator.

Aastrom does not manufacture products, nor does it intend to. It arranges with third parties to manufacture its candidate products and has agreements with SeaMED and Ethox Corporations and Anchor Ad-vanced Products, Mid-State Plastics Division, for the collaborative development and manufacture of certain components of the Aastrom-Replicell™ System.

Large Potential Benefits
Patients — the main beneficiaries of the new technology — are expected to gain from a less invasive procedure that is cost effective, provides greater procedural flexibility, and offers tumor purging benefits. In addition, because of fewer hospital or clinic visits, total costs are expected to be as much as 25 percent less ($12,000 instead of $16,000) than costs for PBPC apheresis. Furthermore, if the Aastrom technology substantially decreases the cost of cell transplantation, others who could not have afforded the treatment will now be able to and will benefit. Their benefit may well be life itself, since bone marrow transplantation for cancer patients is frequently a life-saving therapy.

A study of tissue engineering projects, conducted by economists at Research Triangle Institute, Inc. (RTI), under contract to the ATP, noted that Aastrom achieved ATP-project results one to two years earlier than would have been possible without the ATP award. Having the ATP funds also helped the company attract additional equity capital and establish new strategic partnerships. These, in turn, helped accelerate the company’s R&D even more.

Wide-scale use of the System is expected to produce large benefits across the economy via reduced treatment costs and lower risks to patients undergoing cell harvesting and transplantation. The RTI study estimates that the present value of expected net benefits from using the System technology for just one type of application — treating cancer patients with solid tumors — exceeds $100 million. The study estimates that ATP’s contribution of $1.5 million to the project will generate nearly $50 million of the expected benefits by speeding the technology’s development by one to two years. The RTI study did not attempt to develop estimates based on characteristics of System-based stem cell transplantation that might yield better patient outcomes. It focused only on cost savings.

In addition, the study did not attempt to estimate the value of the effects that a number of other potential applications might have. First use of the System technology is for expanding small amounts of stem cells from bone marrow. It has now been extended to the production of stem cells from umbilical cord blood. Other possible applications include immunotherapy, stem cell gene therapy and cells for solid tissue repair. More benefits can be expected to be generated as the company applies the technology to growing other types of cells — platelets and red blood cells, as well as liver, kidney and nerve tissue — outside the body.

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Date created: April 2002
Last updated: April 12, 2005

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