One of the most significant news items of the past few weeks was the announcement that Geron will discontinue development of its stem cell products in favour of its portfolio of novel oncology compounds. This news comes less than 18 months after Geron received approval to conduct the first ever clinical trial involving embryonic stem cells, which made it the “poster child” for the sector and gave hope to patients with spinal cord injuries and (indirectly) many other degenerative diseases for which stem cell products are considered to be the most likely route to a cure. This is a significant setback, which will send ripples far wider than the company itself.
It doesn’t seem that the decision was made on the basis of the underlying science, or even the specific compound, being flawed. Indeed, less than a month ago the company gave a positive update on the phase 1 trial on its spinal cord injury treatment. Instead, the announcement spoke of “the current environment of capital scarcity and uncertain economic conditions” and that the decision was made “after a strategic review of the costs, value inflection timelines and clinical, manufacturing and regulatory complexities“, concluding that the move was necessary to ensure there was “sufficient financial resources to reach these important near-term value inflection points for shareholders without the necessity of raising additional capital.“ In short, they chose to focus on less controversial products that are further ahead in their development rather than a product stream with more question marks over its regulatory and political acceptability that might “kill the company” before making it to market.
This was, of course, a pragmatic and sensible decision for a publicly-listed company to make on behalf of its shareholders. However, it is a saddening decision for the science as a whole and sends a worrying message about the capability of the biomedical industry to pursue the step-change type of innovation that it needs in the long-term.
In the near future, companies need to replace their current portfolio of blockbuster drugs (which are effectively “one size fits all”, and were introduced with relatively few constraints on pricing) with a larger portfolio of products, with their price tightly linked to effectiveness in precisely defined patient groups. This presents a set of managerial and economic (and, to a lesser extent, scientific) challenges which, although complex, are meat and drink for the analysts who drive the investment community. However, this line of development will only get us so far before we hit a barrier where the cost of demonstrating safety, efficacy and value at the individual level outweighs the revenue these products can realise. There is only so much more efficient our clinical development can be…
Then we will need entirely new technologies enabling us to address areas of therapeutic need that are otherwise effectively unmet, such as stem cell technologies. While Geron’s decision is probably the right move in difficult circumstances, it is imperative that it does not provoke the entire industry (or, more importantly, the entire investment community) to shift away from this area of research. Geron shows some degree of commitment to this with its intention to sell or license its stem cell assets to other players, but for this to succeed the investment community needs to have more courage in addressing the regulatory, political and commercial unknowns around stem cell products and to extend its horizon for a return on its investment in this important area.
In the current economic climate, this is a “big ask” but the long term consequences of not doing so would be worse all round.