Dainippon Partnership Rejig Helps Healios Focus Resources
Executive Summary
Big pharma partner takes on prime development responsibility for novel AMD cell therapy as Japanese venture concentrates resources on other in-progress trials.
Japanese regenerative medicine venture Healios KK and big pharma partner Sumitomo Dainippon Pharma Co. Ltd. (SDP) have reallocated roles and costs under an agreement for a novel cell therapy for age-related macular degeneration (AMD).
The two partners say the move is designed to speed up development and streamline sales and manufacturing activities, while allowing Healios to allocate more near-term attention and resources to its current clinical pipeline.
Following joint discussions, the revisions modify the original 2013 joint development agreement between the firms, under which they are progressing a regenerative therapy for wet/dry AMD and other refractory retinal disorders based on retinal pigment epithelial cells (RPEs) derived from induced pluripotent stem cells (iPSCs).
SDP will now take over from Healios the main responsibility for conducting clinical trials with the therapy, HLRC011, and unlike before is now able to jointly submit (with Healios) related manufacturing and marketing approvals in Japan.
A previous cap of JPY5.2bn ($48m) on SDP's contribution to development costs has been lifted, and the larger company will now bear a proportion of costs under a "flexible framework," details of which are remaining confidential due to their strategic nature.
Reflecting these changes, SDP's total development milestone payments have now been capped at a maximum of JPY1.0bn (of which JPY0.7bn has already been received), rather than JPY1.6bn; SDP additionally gets non-exclusive global rights to the therapy on top of its earlier Japan-only exclusive rights.
Manufacturing JV Changes
On the manufacturing side, the two companies set up an equally owned Japanese joint venture, Sighregen, in 2014 to manufacture and also conduct sales promotion of the AMD therapy.
The promotional function has now been transferred to SDP, with Sighregen - which now has around 20 staff - to focus solely on manufacturing. The facility is located within an SDP regenerative medicine site in Osaka.
SDP also made an equity investment in Tokyo-based Healios in 2013 as part of the original deal, and this arrangement continues unchanged.
Moving Into Trials
HLRC011 is now moving into its first clinical trial program, in Japan, and involves the transfer of RPE cells into the eye, via either a single suspension injection or cell sheet. Functional decline of these cells is thought to be linked to both the "wet" and "dry" forms of AMD.
The wet form of the disease involves photoreceptor impairment through abnormal neovascularization caused by RPE cell damage, while the dry form stems from age-related inflammation and death of RPE cells.
Healios originally acquired an exclusive worldwide licence to a patent to commercialize this technique from Japan's national research institute, Riken. It has also licensed basic iPSC creation technology from iPS Academia Japan, the technology licensing arm of Kyoto University, the home of Japanese iPSC pioneer and Nobel Prize winner Shinya Yamanaka.
Focus On Somatic Therapies
Healios, which was formed as Retina Institute Japan in 2011 and floated on the Mothers bourse in Tokyo in 2015, raising around $76m, is already conducting two early-stage trials in Japan. But both these are regenerative therapies based on somatic (as opposed to iPSC), bone marrow-derived adult somatic stem cells.
These are being developed for ischemic stroke and acute respiratory distress syndrome, and trials with HLCM051 in the latter setting started recruitment recently. (Also see "Japan's Healios Progresses Novel Cell Therapy For ARDS" - Scrip, 23 Apr, 2019.)
The venture is also continuing to evaluate partners and technology, and is "making progress in creating next generation iPS cells which will require the use of minimal or no immunosupressants via gene editing technologies," chairman and CEO Hardy Kagimoto noted.
The bioventure reported a widened net loss equivalent to around $46m on zero revenues in calendar 2018, while R&D expenses (including licensing costs) more than doubled to nearly $39m.
For its part, SDP has positioned regenerative medicine as a core R&D focus, and a Phase I/II, investigator-initiated trial is already underway in Japan with an allogeneic, iPSC-derived dopamine neural progenitor cell therapy for Parkinson's disease.
In late 2014, Japan enacted revised and new regulations governing the development and approval of cell and regenerative therapies, in a move seen as highly supportive for the sector.
Strategically, the country is aiming to build on its pioneering research into iPSCs to become a global leader, and several cell therapies are already available and covered by the national health insurance scheme. (Also see "Japan Regenerative Medicine Laws Take Effect, Encourage Industry" - Scrip, 4 Dec, 2014.)
New Healios-Supported Fund
In another financing-related development, Healios said it will be one of a number of limited partners in a new JPY10bn Japanese fund that will invest in the bioscience industry.
Majority Healios-owned Apollo Capital Partners plans to invest in a limited liability partnership that will be the general partner in the fund, to be set up in the second half.
Under a service agreement with the fund, ACP will become a consolidated Healios subsidiary once the fund is set up, and will receive fees for managing the fund. These will be booked as consolidated sales by Healios.
The new fund will invest around JPY1bn on average in bioventures both inside and outside of Japan over a planned 10-year period, and Helios said it aims to gain access to technology, information and possible partners along with investment returns.
The fund may also invest in early stage technologies at Healios, again allowing the company to focus available resources on its clinical stage pipeline.