Periodic Reporting for period 1 - AGLARIS (AGLARIS: The First Fully-automated Bioreactor for Large Scale Human Stem Cell Production through an Iterative Process.)
Berichtszeitraum: 2016-06-01 bis 2016-09-30
The manufacture of commercial therapeutic products incorporating HSCs (Human Stem Cell) as an active ingredient is a technological jump beyond conventional biologics cell culture production. Nonetheless, the only bioreactors commercially available are adaptations of the conventional ones designed for traditional cell cultivation. If HSCs are to be used routinely for clinical or drug discovery applications, they must be produced at an affordable cost.
The solution proposed in the AGLARIS project is introducing a new bioreactor (patent WO 2013/186318) that enables an automated and cost-effective large-scale HSC manufacturing while meeting the quality requirements for cell-based products by achieving: (1) Complete process automation, operating directly with the initial quantity of cells coming from biopsy and thus avoiding a manual pre-cultivation step (2) Iterative production mediated by Microcarriers, achieving 5000M of cells in just one step, since cells can be easily detached from microcarriers, varying the temperature by 40C. On the contrary, hollow-fiber bioreactors are based on batch production and the use of harmful products for cell detachment (3) AGLARIS uses minimal amounts of expensive reagents: the 600M of cells required for a disease treatment cost 1015€. When produced manually, costs can reach 9.347€, and by using hollow-fiber Bioreactors 15.643€. Thus, by using AGLARIS the production costs will be reduced by up to 91%.
The project’s final goal is the commercialization of the AGLARIS device in 2019. To achieve successful commercialization, the following general objectives have been defined: (1) optimization of the current prototype to end up in a fully functional commercial device (2) obtaining the mandatory CE marking before commercialization (3) performing validation studies by end users to demonstrate bioreactor efficiency (4) full AGLARIS internationalisation by introducing our bioreactor to our target users (5) Confirm a potential target market of 56.2€M within first 5-years of business (best-case scenario). The ultimate objective of the Phase 1 project was to perform a detailed analysis of the overall project feasibility (commercial, technical/scientific and financial points of view) to undertake the next steps towards the market under a minimum risk scenario.
The solution proposed in the AGLARIS project is introducing a new bioreactor (patent WO 2013/186318) that enables an automated and cost-effective large-scale HSC manufacturing while meeting the quality requirements for cell-based products by achieving: (1) Complete process automation, operating directly with the initial quantity of cells coming from biopsy and thus avoiding a manual pre-cultivation step (2) Iterative production mediated by Microcarriers, achieving 5000M of cells in just one step, since cells can be easily detached from microcarriers, varying the temperature by 40C. On the contrary, hollow-fiber bioreactors are based on batch production and the use of harmful products for cell detachment (3) AGLARIS uses minimal amounts of expensive reagents: the 600M of cells required for a disease treatment cost 1015€. When produced manually, costs can reach 9.347€, and by using hollow-fiber Bioreactors 15.643€. Thus, by using AGLARIS the production costs will be reduced by up to 91%.
The project’s final goal is the commercialization of the AGLARIS device in 2019. To achieve successful commercialization, the following general objectives have been defined: (1) optimization of the current prototype to end up in a fully functional commercial device (2) obtaining the mandatory CE marking before commercialization (3) performing validation studies by end users to demonstrate bioreactor efficiency (4) full AGLARIS internationalisation by introducing our bioreactor to our target users (5) Confirm a potential target market of 56.2€M within first 5-years of business (best-case scenario). The ultimate objective of the Phase 1 project was to perform a detailed analysis of the overall project feasibility (commercial, technical/scientific and financial points of view) to undertake the next steps towards the market under a minimum risk scenario.
During this Phase 1 project we performed an assessment of the feasibility of our business innovation project from different perspectives: commercial, technical/scientific and financial.
Regarding the technical feasibility after analysing the device’s regulatory frame, the strategy will be complying with GMP requirements as a prerequisite for our clients’ acceptance, thus the implementation of a Quality System is ongoing and its implementation has been fully scheduled to meet quality standards before AGLARIS commercialisation after the completion of the Phase 2 project. These QSs will also support the validation and optimization of the AGLARIS prototypes under the quality requirements. Regarding the CE-marking, we scheduled the prototype quality testing by an expert to ensure that the prototype reflects agreements on the technical description of the characteristics to be fulfilled by the prototype with the requirements outlined by the CE Directives. We can confirm that AGLARIS software works with all key functionality available for demonstration and test the cell cultivation in a fully automated manner, well integrated with operational hardware systems, demonstrating operational feasibility since most software bugs have been removed during the execution of Phase 1. Furthermore, the SW architecture allows the incorporation of additional features that could be necessary during AGLARIS’s final technology development.
Regarding commercial feasibility, we have identified stakeholders of AGLARIS’s solution along the value chain. We identified as essential using Class-VI materials for AGLARIS manufacturing and we have defined materials and component specifications/features for demanding to our potential suppliers in the EU. We have also identified suppliers for electronic and control components, flow meters, sensors, customised pieces and disposables, among others. Our research on distributors has allowed us to identify the most suitable ones. The distributors company sizes, presence at a European and international level, position within cell therapy areas and previous experience in the distribution of other bioreactors were some of the factors analysed. We have also identified AGLARIS’s potential clients within the cell therapy market that will be targeted as the most relevant. Among them, two count among the most suitable profile for being selected as the future validators of AGLARIS prototype for the next technology optimization to be performed during the Phase 2 project.
To analyse financial profitability, we have projected the 5 years’ project profitability in different scenarios (base case, pessimistic and optimistic). The 3 scenarios differ in the percentages of market penetration we might expect in the different geographical markets we are planning to enter (the EU and USA). Even in the most pessimistic scenario, the beak even is reached in the first selling year and the R.O.I (return of investment) is 284%. The base case, as the one we consider the most realistic and the base of our 5 years’ business plan, reaches break even in year two and provides an R.O.I of 295%. This means that for each euro invested in the project it seems completely realistic to achieve a profitability of 2.95€ in 5 years’ commercialization. This provides clear evidences on the AGLARIS project’s profitability.
Thus, once evaluated the possibility of applying for phase 2 we can confirm that our technology will be technically viable once validated by the identified end-users and that there is a strong market demand as reflects identified potential AGLARIS future clients. In summary, both technical and commercial issues enable us to apply for Phase 2 in the next cut-off.
Regarding the technical feasibility after analysing the device’s regulatory frame, the strategy will be complying with GMP requirements as a prerequisite for our clients’ acceptance, thus the implementation of a Quality System is ongoing and its implementation has been fully scheduled to meet quality standards before AGLARIS commercialisation after the completion of the Phase 2 project. These QSs will also support the validation and optimization of the AGLARIS prototypes under the quality requirements. Regarding the CE-marking, we scheduled the prototype quality testing by an expert to ensure that the prototype reflects agreements on the technical description of the characteristics to be fulfilled by the prototype with the requirements outlined by the CE Directives. We can confirm that AGLARIS software works with all key functionality available for demonstration and test the cell cultivation in a fully automated manner, well integrated with operational hardware systems, demonstrating operational feasibility since most software bugs have been removed during the execution of Phase 1. Furthermore, the SW architecture allows the incorporation of additional features that could be necessary during AGLARIS’s final technology development.
Regarding commercial feasibility, we have identified stakeholders of AGLARIS’s solution along the value chain. We identified as essential using Class-VI materials for AGLARIS manufacturing and we have defined materials and component specifications/features for demanding to our potential suppliers in the EU. We have also identified suppliers for electronic and control components, flow meters, sensors, customised pieces and disposables, among others. Our research on distributors has allowed us to identify the most suitable ones. The distributors company sizes, presence at a European and international level, position within cell therapy areas and previous experience in the distribution of other bioreactors were some of the factors analysed. We have also identified AGLARIS’s potential clients within the cell therapy market that will be targeted as the most relevant. Among them, two count among the most suitable profile for being selected as the future validators of AGLARIS prototype for the next technology optimization to be performed during the Phase 2 project.
To analyse financial profitability, we have projected the 5 years’ project profitability in different scenarios (base case, pessimistic and optimistic). The 3 scenarios differ in the percentages of market penetration we might expect in the different geographical markets we are planning to enter (the EU and USA). Even in the most pessimistic scenario, the beak even is reached in the first selling year and the R.O.I (return of investment) is 284%. The base case, as the one we consider the most realistic and the base of our 5 years’ business plan, reaches break even in year two and provides an R.O.I of 295%. This means that for each euro invested in the project it seems completely realistic to achieve a profitability of 2.95€ in 5 years’ commercialization. This provides clear evidences on the AGLARIS project’s profitability.
Thus, once evaluated the possibility of applying for phase 2 we can confirm that our technology will be technically viable once validated by the identified end-users and that there is a strong market demand as reflects identified potential AGLARIS future clients. In summary, both technical and commercial issues enable us to apply for Phase 2 in the next cut-off.
Regenerative medicine is the major application of HSCs cells as well as neurology, orthopedics, oncology, cardiology, hematology and others (diabetes, injuries, and wounds). Another prominent application of stem cells is drug discovery and development, mainly performed by big pharma. The HSCs therapy market is poised to grow at a CAGR of 39.5% from 2015 to 2020, reaching €330M by 2020. The overall market predictions above are considered conservative given the existing clinical demand and the volume of cell therapy clinical trials that are currently underway, with at least 157 trials ongoing. All other indicators, including industry growth (521 cell therapy companies identified as potential end-users excluding big pharma) and bespoke infrastructure, look highly promising for a secure future for the HSCs market.
The burgeoning numbers of HSCs required for cell therapy and drug discovery applications represent a strong market driver for the development of efficient manufacturing methods. Differentiating HSCs into desired cell lineages and then expanding them is technically challenging and prohibitively expensive, particularly when produced manually using traditional cell culture methods. Given these limitations, it is likely that manufacturing methodologies will use partially or fully automated systems such as some developed bioreactors. However, none of the current bioreactors demonstrated efficiency in terms of costs of goods of the cell culture process.
Both cell therapy companies and big pharma have to go through the same process to develop a licenced medical product that will provide returns on investment. However, the different types of companies have very different ways of operating and taking risk. Stem cell technology is relatively new and is seen by commercial organisations as risky because there are a great many unknowns that could prevent any one particular therapy from gaining a licence. Although all of the world’s ten largest pharmaceutical companies are to some extent involved in the commercialisation of stem cells, they are only investing on a relatively small scale. Most of the advances are currently taking place in smaller cell therapy companies, sometimes in collaboration with large company partners.
The AGLARIS project emerged as the solution to meet the expanding market for HSCs in both clinical and drug discovery applications, since it enables performing an automated, cost-effective, large-scale cell manufacturing process enabling cost savings up to 92% compared to current techniques. The previously elucidated benefits for the end user sustain the business opportunity, which translates in the most conservative scenario to revenue of €43.2 M within first 5 years of business.
The burgeoning numbers of HSCs required for cell therapy and drug discovery applications represent a strong market driver for the development of efficient manufacturing methods. Differentiating HSCs into desired cell lineages and then expanding them is technically challenging and prohibitively expensive, particularly when produced manually using traditional cell culture methods. Given these limitations, it is likely that manufacturing methodologies will use partially or fully automated systems such as some developed bioreactors. However, none of the current bioreactors demonstrated efficiency in terms of costs of goods of the cell culture process.
Both cell therapy companies and big pharma have to go through the same process to develop a licenced medical product that will provide returns on investment. However, the different types of companies have very different ways of operating and taking risk. Stem cell technology is relatively new and is seen by commercial organisations as risky because there are a great many unknowns that could prevent any one particular therapy from gaining a licence. Although all of the world’s ten largest pharmaceutical companies are to some extent involved in the commercialisation of stem cells, they are only investing on a relatively small scale. Most of the advances are currently taking place in smaller cell therapy companies, sometimes in collaboration with large company partners.
The AGLARIS project emerged as the solution to meet the expanding market for HSCs in both clinical and drug discovery applications, since it enables performing an automated, cost-effective, large-scale cell manufacturing process enabling cost savings up to 92% compared to current techniques. The previously elucidated benefits for the end user sustain the business opportunity, which translates in the most conservative scenario to revenue of €43.2 M within first 5 years of business.