After a relatively tough year for stem cell companies on the public markets, they finally had something to cheer about – a regulatory milestone that could pave the way for a number of future approvals of stem cell therapies currently in late-stage clinical trials. The breakthrough event was Health Canada's approval of Prochymal (remestemcel-L), Osiris Therapeutics Inc.'s allogeneic stem cell treatment for graft-vs.-host disease (GvHD) in children. (See BioWorld Today, May 21, 2012.)

The decision marked the world's first regulatory approval of a manufactured stem cell product and the first therapy approved for GvHD – a devastating complication of bone marrow transplantation that kills up to 80 percent of children affected, many within just weeks of diagnosis.

While, in the aftermath of the announcement, the share price of Osiris (NASDAQ:OSIR) jumped 14.6 percent and after week of trading their shares were down slightly closing at $6.33, up 14 percent on Thursday, the needle did not move much for the rest of the stem cell companies. This is probably due to the fact the Canadian approval represents only a small market opportunity for the company – around $15 million annually according to Jefferies analyst Eun K. Yang. In fact, since June 1 last year to the present, the aggregate of share prices of the group, which includes, in addition to Osiris, such companies as Aastrom Biosciences Inc., Athersys Inc., Mesoblast Ltd., Neostem Inc., Neuralstem Inc., and Pluristem Therapeutics, Inc., has fallen approximately 30 percent.

Their collective performance is reflective of the fact that over the past year the sector has faced a number of bumps in the road including Geron Inc.'s surprising exit from the embryonic stem cell field. (See BioWorld Today, Nov. 16, 2011.)

Nevertheless, the Osiris achievement could be just what is needed to re-spark investor interest once again after remaining on the sidelines for a significant period. William Prather, senior VP of corporate development at Pluristem Therapeutics Inc., told BioWorld Insight.

Pluristem's own stock (NASDAQ:PSTI) had jumped 31 cents, or 13.3 percent, recently after reporting a single case study in which a patient with aplastic bone marrow received an intramuscular injection of PLacental eXpanded (PLX) cells under compassionate use and saw improvement. (See BioWorld Today, May 10, 2012.)

"The company now has several data points to indicate that our PLX cells may work for systemic diseases when given locally, away from the target organ, and without a need to give cells intravenously," Prather explained.

The Pipeline is Full

The stem cell research field certainly has a healthy pipeline of products under development. For example, Mesoblast Ltd. reported last month that it had enrolled 50 percent of the total number patients for its Phase II clinical trial investigating the use of allogeneic, or off-the-shelf, mesenchymal precursor cells (MPC) for non-surgical restoration of degenerated intervertebral discs and the treatment of low back pain.

Aastrom Biosciences Inc. reported that the first patient has been enrolled in the REVIVE Phase III clinical trial of ixmyelocel-T cell therapy in the treatment of no-option patients with critical limb ischemia (CLI); and Pluristem recently received U.S. FDA approval to begin a Phase II clinical trial using its PLX-PAD cell product candidate intramuscularly for the treatment of intermittent claudication (IC), a subset of peripheral artery disease (PAD).

Another encouraging sign is the fact that promising stem cell research is making its way from the bench into commercial development. One of the latest entrants sees the teaming up of Actium Research Inc., of Toronto, Ontario, and McMaster University, of Hamilton, Ontario, to target cancer stem cells and regenerative medicine.

Actium has entered into a collaboration that covers McMaster's adult human stem cell lines, cancer stem cells and a directed differentiation platform developed by Mick Bhatia and his research team at the McMaster Stem Cell and Cancer Research Institute.

The company was founded by David Young and Helen Findlay, two experienced Canadian biotech veterans and no strangers to cancer research during their tenure at Arius Research Inc., a company they were involved in creating. The Toronto-based public biotech was focused on the discovery and development of therapeutic cancer antibodies and its pipeline included CD-44, one of the first specific cancer stem cell drugs to enter human clinical trials. The company was sold to Roche Holding AG in 2008 for approximately $190 million. (See BioWorld Today, July 24, 2008.)

It was this experience and focus that attracted Actinium to Bhatia's research, Findlay told BioWorld Insight. Initially, Actium's business plan will involve developing anti-cancer stem cell drugs that are directed against a newly identified cancer stem cell marker in leukemia and breast cancer. They will build upon Bhatia's latest research that was published in the May 24, 2012, issue of Cell. The paper reported the use of a fully automated robotic system to test more than a dozen different compounds and their effects on cancer stem cells. The scientific team at McMaster University discovered that the drug, thioridazine, successfully kills cancer stem cells and unlike chemotherapy and radiation, it appeared to have no effect on normal stem cells.

According to Bhatia, the antipsychotic drug works through the dopamine receptor on the surface of the cancer cells in both leukemia and breast cancer patients. This finding could lead to its use as a biomarker for the early detection and treatment of breast cancer and early signs of leukemia progression.

Stem Cell Field Maturing

The California Institute of Regenerative Medicine's (CIRM) new strategic plan that includes a five-year goal to "establish proof-of-principle in preclinical animal models for treatment of more than 10 diseases" is another sign that the stem cell field is maturing. With CIRM's announced intention to dedicate more funding that will support projects in the initial stages of identifying drugs or cell types that could become disease therapies, this is good news for biotechs providing them with another source of funds to tap into in an environment that remains challenging for raising capital.

CIRM said it is committing up to $30 million to a Strategic Partnership Awards Initiative to attract industry engagement and investment in CIRM-funded stem cell research. Under the program CIRM plans to issue three or more awards of up to $10 million each. The successful applicants will have to match those funds, either dollar for dollar, or by providing in-kind services such as manufacturing and product development.

"We are a lot closer to having promising therapies ready for clinical trials, so it makes sense that we step up our engagement with industry to help fund those trials and move those therapies closer to approval by the FDA," said Duane Roth, vice chair of the governing board of CIRM.

With stem cell developments and research progress occurring almost daily, the sector appears to have a new belief in itself – a factor that may not be lost on investors in the upcoming months.