GE Healthcare Barges into Cell-Therapy Arena with Swiss Buy; Where’s the FDA?

GE Healthcare (Little Chalfont GBR) just signaled its intention to build a $1 billion business which offers specialized manufacturing tools for an upcoming tidal wave of cell therapies by acquiring Swiss firm, Biosafe Group SA (Eysins).

The acquisition of Biosafe expands GE Healthcare’s “end-to-end ecosystem of products, solutions, and services-therapy customers and expands GE’s technology to reach a number of new cell and therapy types,” according to Kieran Murphy, CEO of Life Sciences, GE Healthcare.

The acquisition by GE of Biosafe doubles its presence in the field. Biosafe, headquartered in the Lake Geneva region of Switzerland, markets its products with closed fluid pathways, built-in traceability, and single-use consumables, said Murphy. Using cells to fight cancer is a far cry from GE’s better-known areas such as power generation and aviation.

But John Flannery, the head of the U.S. industrial giant’s $18 billion-a-year healthcare operation can imagine a huge, high-margin opportunity. Flannery, who leads GE Healthcare from its headquarters in England, figures he has grabbed an important part of the supply chain by buying Biosafe.

“We want to double down on life sciences, and especially so in the cell therapy business,” he said in a statement. “This more than doubles our capability right now in cell therapy.

GE announced its acquisition of Biosafe on Wednesday but didn’t say how much it was paying. A GE spokesperson said the addition of Biosafe, which was founded in 1997, would add 85 new employees at approximately 230 customers, doubling GE’s cell-therapy staff and sales.

The buy comes at an ironic time for cell therapy, following the deaths of three leukemia patients in a trial of Juno Therapeutics Inc.’s (Seattle WA) treatment JCAR015, which the FDA briefly put on hold. Both GE’s and Biosafe’s confidence in the technology remains solid.

“Together with GE, we will have the combination of biological, engineering, and industrial capabilities to help accelerate the fields of cell therapy and cellular immunotherapy into the mainstream, benefiting patients globally, and bringing the vision of personalized medicine to reality,” said Claude Fell, founder and chairman of Biosafe.

GE estimates there are now 375 active T-cell therapy programs, and seven companies with a market value of $17 billion focused on the so-called CAR-T cell therapies. Internal GE research suggests that sales of cell therapies will reach $10 billion by 2020 and $30 billion by 2030.

Producing the therapies, however, is extremely complex, since it involves extracting cells from an individual patient, altering them to sharpen their ability to kill cancer cells and then infusing them back into the patient. This, effectively, makes the production process an integral part of the product, which is where GE comes in, said Flannery.

Steve’s Take: Media coverage of GE’s acquisition of Biosafe fails to bring up the long-simmering debate about whether cell therapies, which are sometimes described in advertisements as “miraculous,” should be the subject of regulatory oversight.

Instead it exalts the savvy purchase by a corporate behemoth, crashing into another potential gold mine in high-tech medicine to get a leg up on its rich rivals and make billions.

But consider a paper (link to press release) published on June 30 by Paul Knoepfler of UC Davis and Leigh Turner of the University of Minnesota in Cell Stem Cell that found about 350 businesses in America selling unregulated stem-cell therapies for a wide range of ailments, many more than previously thought.

Stem-cell clinics mostly use adult stem cells from the patient’s themselves (for example, from fat tissue), grown in a dish then reinjected. The costs to patients are thousands of dollars; a lot of money but not nearly what GE Health hopes to rake in.

Here’s what’s at stake. The promises of cell therapy are real enough. For example, The Economist recently pointed out in its July 9 issue that earlier this year a study showed that patients with end-stage heart failure fared better when given stem cells extracted from their own bone marrow.

Stem cells seem to home in on damaged or inflamed tissues and aid in repairing them. Some of the treatments, however, which promised to help neurodegenerative diseases for which there are no cell therapy have yet to be proven effective. According to The Economist, patients nevertheless have been lining up to receive them, and in some cases pay tens of thousands of dollars.

The recent discovery of a flourishing industry in America is putting pressure on the Federal Drug Administration (FDA) to resolve the impasse over oversight. At the heart of the debate is whether stem cells, for example, are biological drugs, and therefore regulated by the FDA, or whether they are tissue transplants which are not (and do not require clinical trials).

I agree with The Economist that although they would seem to be tissue transplants, to qualify as such, stem cells need to be “minimally” manipulated and also carry out the same functions in the treated tissue as they do in the tissue from which they were extracted. Whether they are effective or not, the real heart of the issue is their safety.

There will be a crucial hearing on the FDA’s draft guidelines for stem cells in September. This could turn out to be a media circus, with patient advocates likely to attend and praise the benefits of their treatment. The Tufts Center for the Study of Drug Development in 2014 published a report on the cost to develop and bring a drug to market. At $2.6 billion, the figure got noticed.

If that figure is real, that’s a huge cost for a company just to recover. You can imagine what the cell-treatment price per individual would be. Up to $250,000 according to some estimates; others say $500,000. Still, the FDA needs to be careful about landing on clinics with their meager “tens of thousands,” prices. Too much pressure and back they go over the border to Mexico.

Are we headed to the Supreme Court about this? Possibly. What’s at stake? Simply put: a cell treatment without a prescription at a clinic for $10k, or via prescription from GE Health for $250k.