About Lee Buckler, B. Ed, LLB Vice President Business and Corporate Development, RepliCel Life Sciences Inc.

Lee Buckler has been an executive in the cell therapy sector since 2000 beginning with Malachite Management in the Stem Cell Technologies group of companies. Most recently, he was the Managing Director of Cell Therapy Group, a firm he formed in 2008 where he did business development consulting for companies and organizations in or interested in the cell therapy sector. His work included deal-targeting, transactions, market intelligence, competitive analyses, strategic assessments, and market profile planning for companies ranging from top-tier multinationals to start-ups.

Lee has a Bachelor’s Degree in Education and a Law Degree. After law school, Lee did a one year judicial clerkship with the B.C. Supreme Court and was a practising attorney for three years at Edwards, Kenny & Bray. Lee served six years as the Executive Director of the International Society for Cellular Therapy and just over two years as Director of Business Development for Progenitor Cell Therapy. He is on the editorial advisory boards of the journal Regenerative Medicine and the BioProcess International magazine, as well as the Co-Chair of the Alliance for Regenerative Medicine’s Communications and Education Committee. He co-founded Cell Therapy News, founded Cell Therapy Blog, founded and continues to manage the LinkedIn Cell Therapy Industry Group, co-founded Regenerative Medicine Jobs, and is an active industry commentator in publications and in social media. Lee serves on numerous industry conference advisory boards, is an advisory board member for BioCision and RoosterBio, and is on the Board of Directors for Hemostemix.

Recent publications include a book chapter entitled, “State of the Regenerative Medicine Industry” in The Delivery of Regenerative Medicines and Their Impact on Healthcare (CRC Press) and “Opportunities in Regenerative Medicine: The Global Industry and Market Trends” in BioProcess International, March 2011 Supplement.

RepliCel Life Sciences Inc.
www.replicel.com
RepliCel is a public company trading on the TSX.V:RP and on the OTCQB:REPCF

Questions and Answers

Q: You are a keen observer of the cellular therapy industry. What outlook can you share with patients who are hoping for accelerated access to cures?
A: Thanks for the opportunity to address your readers, Barbara. It’s an interesting and challenging question you lead with because firstly, it emphasizes the fact that cell therapy is seeking to usher in a major paradigm shift in the pursuit of therapeutics which aims to ‘cure’ rather than to simply treat. This is potentially revolutionary not just to patients, but also to the biopharmaceutical industry, medical establishment, and most notably disruptive to payors who have to deal with how to value cures rather than palliative approaches or temporary fixes. I believe cell therapy will eventually deliver on its promise to cure many conditions we now consider incurable, and many for which current treatments are quite unsatisfactory. But we’re not there yet and this will take time.

Despite a first wave of approved cell therapies in regulated markets and a plethora of cell-based treatments being administered in various clinics around the world, we have yet to deliver the kind of robust evidence that demonstrates cell therapies are curative - or even functionally curative - in reliably reproducible manners. We have tremendously promising early-stage clinical data and very exciting clinical anecdotes. For most people, most physicians, most regulators, and most companies, this evidence has not yet reached a level sufficient to justify providing widespread commercial access.

In my opinion, patients currently do not ‘yet’ have access to cell therapy ‘cures’ because we haven’t ‘yet’ produced the evidence that convincingly demonstrates the cell therapies we are developing – and ‘yet’ some that are selling - are curative. If your question were, “When will patients have access to cell therapies before we can convincingly call them cures?” I would say, that already exists. Access to treatments for which there is not yet enough reliable evidence to make an informed decision about their potential risks or benefits is different than access to treatments or products for which there is enough established and accessible evidence to support independent adjudication of their risk and benefit profile.

My short answer to your question is that patients will have access to cures when the clinical science provides enough evidence to demonstrate that any cell therapy in question is reliably curative and the risks are believed to be known and measurable. Patients already access almost any cell therapy treatment they want if they are willing to pay, travel, and take unknown risks for unpredictable clinical results. If you’re asking, “When will they have access to products which have evidence associated with them which regulators have determined is acceptable to permit their commercial distribution?”, the answer to that lies more in how successful clinical trials are than when gatekeepers will allow them. In my opinion, neither regulators nor companies are preventing patients from accessing cures. Clinical science has yet to reliably demonstrate these treatments are curative in the ways which we all believe they can and will be.

The other part of your question hinges on the term ‘accelerated’ and that really goes to the heart of how much data we need to approve products and provide patients access to them.

The question here is whether patients should and will be provided access to cell therapies in ways which are more expedited than has traditionally been the case for other types of therapeutics. I believe the answer is ‘yes’.

There are several initiatives currently being put in place around the world which in different ways attempt to provide faster access to therapeutics for patients that need them. These range from the ‘right-to-try’ initiatives in the U.S., which you have highlighted, to the FDA’s breakthrough designations, to accelerated approval programs in Europe, to more informal approaches by various agencies which result in more expedited approvals (e.g., South Korea), to what may be the most adventurous regulatory experiment now transpiring in Japan by the PMDA for cell-based therapies.

With the recent adoption of a radically new and expedited pathway for cell therapies, the Japanese PMDA has provided a mechanism for patients to access – and companies to market – cell therapy products (at least on a ‘conditional approval’ basis) earlier (with less clinical evidence) than is likely to be possible any time soon in any other regulated market in the world. This will be determined on a case-by-case basis using a risk-based approach and we have yet to see precisely how these rules will be interpreted and implemented, but the world (industry, patients, and regulators) will be watching this with keen interest.

Q: Can you update us on the accelerated approval process for cellular therapy that is part of Japan's Regenerative Medicine Act; have any therapies commenced yet, and what does the pipeline look like? Could a similar approval process happen in the U.S.? Given that medicine in Japan is 70% government funded, is that why they were able to implement this, and does it make it less likely in the U.S.?
A: To answer the last question first, I believe in markets where there is government-based medical insurance - regulatory policy is influenced to some extent by reimbursement pressures (and vice versa). However, in the United States in particular, these are uniquely disconnected. We have seen many approvals of products in the U.S. which have no reimbursement for years after approval has been granted. I don’t believe the fact that the U.S. has more private-pay medical insurance makes regulatory innovation more or less difficult. It makes reimbursement innovation much more difficult but that is a much different debate. In my opinion, the two things holding back the U.S. from the same kind of regulatory innovation are the litigious nature of American society and the political paralysis currently strangling any type of bold leadership initiatives. Both systems punish risk-taking and reward conservative intransigence.

What is interesting to note is that the Japanese PMDA was typically perceived to be one of the most conservative regulatory agencies in the world until Prime Minister Abe mandated the agency to rethink the regulation of cell therapies in a way which emphasized safety and reduced the regulatory agency’s emphasis on policing efficacy. The vision was for the PMDA to be empowered and motivated, in its discretion, to provide expedited market access for products shown to be safe and with some level of ‘predictive efficacy’ where the agency deems conditional approval to be warranted based on the agency's contextually-laden, risk-based analysis. It took considerable political vision and boldness to make this happen. There is no reason why such changes couldn’t happen in other markets but one has to take into account that this requires political leadership with strong vision and boldness, as well as a political system which will allow for bold, innovative change. Some might argue the U.S. currently lacks one or both of these prerequisites.

The new regulatory pathway in Japan for cell-based therapies allows for the PMDA to provide – in its discretion, exercised using a risk-based approach – ‘conditional approval’ to market a cell therapy for up to seven year before an adjudication on ‘final approval’ is required. Conditional approval will be considered where there is strong evidence of safety and evidence of ‘probable efficacy’ produced in clinical trials involving Japanese patients. It would appear such conditional approval will be available to both autologous and allogeneic cell therapies, has no limits associated with the level of ‘manipulation’ of the cells, and is not tied to certain types of medical conditions.

The new rules were only finalized at the end of November 2014. No cell therapies have been granted ‘conditional approval’ yet under the new regulation. We only know of one cell therapy that is actively being considered for conditional approval by the PMDA, but this is not a public process so there may be others under consideration which we don’t know about as yet.

There are a few cell therapies in Japan which were approved for commercial distribution under the old regulations. For a number of historical reasons, there are few industry-sponsored cell therapies currently in clinical development in Japan. What this means is that for the Japanese regulatory changes to have a meaningful impact on the Japanese population, industry, and economy in the near-term (which was the Prime Minister’s motivation for mandating the changes) there will have to be a dramatic number of products currently being developed outside of Japan brought into the country and granted conditional approval. Which products and companies will be in this first wave is anyone’s guess. We know that Mesoblast, Athersys, Pluristem, and RepliCel have, or have announced, concrete activities in Japan. These are allogeneic cell therapy companies using some type of mesenchymal stem cell (MSC) or MSC-like technology. RepliCel is the standout in this list in that it is autologous and using more cell defined cell populations. RepliCel is also one of the only foreign cell therapy companies with a partnership in Japan that involves a manufacturing footprint in the country. The other may be Mesoblast through its partnership with JCR Pharmaceuticals for Prochymal.

In terms of the potential impact of this regulatory change on clinical development and commercialization, here’s an illustrative example. If RepliCel Life Sciences would have launched the same phase 1/2 clinical trial for chronic Achilles tendinosis that was just launched in Canada, I believe we would be 12 months away from the kind of safety and clinical evidence that could well be sufficient to predicate conditional approval to market the product in Japan. That is at least a couple years ahead of where it might be given approval to market anywhere else in the world. That’s a disruptive approach to therapeutic regulation that will mean a lot to patients suffering from this condition, and mean a lot to companies like RepliCel to have such regulatory endorsement and the ability to generate revenue. It is also expected to have a meaningful impact on the Japanese economy as more and more cell therapy companies make commercializing in Japan a much higher priority than it ever was.


Q: Assuming Medicare in the US is the equivalent of 70% government funded insurance in Japan, if the US followed the Japanese model, wouldn't the cost savings be enormous? Even if it was just for knee problems, a stem cell shot costs $3,500 vs a knee replacement cost of $45,000, not to mention all the suffering from surgery recovery and poor outcomes.
A: I think regardless of who is providing the funding for medical treatment, products, and care, the pharmacoeconomics of regenerative medicine is compelling if in fact the products are curative or functionally curative rather than palliative. That’s true even if the cell therapy were more expensive than current standard of care which typically has the kind of side effects and ongoing care costs not associated with cell therapies. We are in La Jolla, California this week speaking to investors from all over the world who are looking to make big-footprint investments driven as much by their social impact potential as the opportunity to generate financial returns. These are the type of investors who understand that to change the way we approach medical care we have to invest in technologies which fundamentally approach medical treatment differently.


Q: The FDA recently loosened the requirements for compassionate use, is there any softening on their regulatory lock up of stem cells, by classifying them as a drug?
A: I believe there is increasing pressures on regulatory agencies to allow more expedited access to all types of treatments using a risk-based approach that emphasizes the benefits of access versus the safety risks in the context of the condition being treated, the treatment alternatives, and an assessment of the potential toxicity of the product/treatment in question based on the available data. If you look at what Japan did, part of the regulatory paradigm shift actually involved putting more cell therapies under the PMDA control rather than less. There was a long tradition in Japan whereby cell-based treatments which were produced and administered in hospitals were outside the PMDA’s purview. In order to justify ‘accelerated’ access to cell therapies, the PMDA also had to raise the bar in terms of its control over safety. To do this, the PMDA removed the long-standing tradition that cell therapies produced and provided without leaving the hospital were outside the purview of the PMDA. This is an interesting contrast to the conviction of many patient advocates in the U.S. who believe that in order to provide accelerated access to cell therapies they have to be somehow removed from the FDA’s mandate.


Q: RepliCel formed a partnership with Shiseido, a Japanese cosmetic giant. It sounds like a treatment for pattern baldness will be the first treatment. What other projects are in the works for anti-aging and cosmetic purposes? Is your goal to make these products affordable and available to the average person or is your target market more for those who currently spend a lot of money on cosmetic surgery?

A: We are very proud of our partnership with Shiseido which has an exclusive license for our pattern baldness product for Asia. It is a very high priority for us to execute partnerships in Japan for one or both of the other two products we have in clinical development based on our NBDS fibroblast platform. One of these is in the dermatology space and the other is for tendon repair. Pricing decisions will be done by, or in consort with our commercialization and marketing partners. Clearly the tension in any such decision is to strike the right pricing balance between maximizing both product margin and market penetration.

As a related aside, I can tell you that one of the reasons we have invested in developing a next-generation dermal injector which has programmable features, is to have better control over delivering reproducible results that depend less on highly-skilled (and expensive) medical practitioners. The expected effect of such a strategy is to democratize the availability of such treatments to a wider group of consumers.


Q: How do you view the new trial just announced at Emory University, 'Clinical trial uses patients' own cells for personalized treatment after bone marrow transplant' http://news.emory.edu/stories/2015/0...hd/campus.html. They are using autologous fresh-culture mesenchymal stem cells to treat GVHD. Is this an indicator that Prochymal (mass manufactured, allogenic frozen stem cell product) already approved for GVHD, is less effective and too expensive?
A: Well firstly Prochymal is only approved in Canada and New Zealand and only for GvHD in pediatric patients. Mesoblast, now the owner of Prochymal, is pushing hard to have it be the first product granted conditional approval in Japan and simultaneously to produce the kind of clinical data to support a wider label in other countries. It is too early to label Prochymal a failure despite its early challenges.

It is also simply too early to predict which kinds of MSC-based products will succeed for the treatment of particular conditions (if any). We have numerous cell therapies on the market today – both allogeneic and autologous. Neither are particularly profitable. I am confident the next wave of cell therapies – both allogeneic and autologous – will find significantly more commercial success than the first wave. Personally, I’ve always been a believer in the potential of autologous cell therapy to be not only clinically but commercially successful. It is easy for traditional biopharma to understand and be attracted to the commercial scalability and logistics of allogeneic cell therapy because it can be mass-produced and positioned for on-demand, off-the-shelf use. On the one hand, one has to be careful not to become too enamored with a business model without a product and conversely, one has to ensure they don’t love a product that has no chance of commercial success. I have many friends in large biopharma that say they’d rather solve the commercial problems around a product with great clinical efficacy over standard of care than get behind a product with great margins but modest efficacy. I think biopharma’s recent enthusiasm for autologous cell-based immunotherapy products is testament to their ability to get excited over treatments with great clinical data, even when they have challenging manufacturing and cost challenges associated with them.


Q: "Injections of fibroblasts have been proven in the lab to help tendons repair themselves, reduce wrinkles and tone up skin, Buckler says. A different set of cells extracted from follicles is used to regenerate hair. The need for three sets of trials for each therapy means RepliCel’s therapies are several years away from reaching the North American market, Buckler says."
That statement is from an article I read in the Windsor Star. Why would the FDA require such expensive, lengthy rigorous testing for each therapy when evidently Japan does not? Are the Japanese simply bigger risk takers or is the U.S. so concerned with any risk that most companies are shying away from trying to deal with the FDA and are taking their product ideas elsewhere?

A: It is clearly a grand experiment that the Japanese PMDA has launched and the world will be watching the results intently. It is arguable that the Japanese approach involved doubling-down on safety while opening up the possibility of expedited approval based on less clinical data where the agency deems appropriate. It is important to keep in mind it is not at all a guarantee that a product will be granted conditional approval based on a relatively small data set. The PMDA will maintain a risk-based approach to its adjudication of market approvals. Clearly Japanese policy makers have decided that there is likely to be a significant potential benefit to allowing expedited market access to certain cell therapies, in certain circumstances, which will be worth any increased risk associated with doing so. As everyone knows, risk-based analysis is very circumstance-dependent. It is difficult for agencies to make blanket policies that are one-size-fits-all. Indeed, my read of the Japanese regulatory change is not that it will result in all cell therapies enjoying much earlier market access, but rather that it provides the opportunity for it to happen in the right circumstances - and that is good news for patients, companies sponsoring such products, and the payors providing care to the patients who might enjoy access to such products.

From an economic competitive perspective, clearly this kind of regulatory innovation provides cell therapy companies the opportunity to re-prioritize where they decide to commercialize their products first. Speaking as a senior executive of such a company, I can tell you it has certainly made working in Japan a much higher priority than it otherwise might have been. If you look at what we are doing as an example, we are conducting trials in Germany, Canada, and Japan (through our partner, Shiseido). We are intentionally circling the wagons around the U.S. market at the moment. We have a strategy for the U.S. market but we believe conducting some of our early clinical work outside the U.S. and perhaps in some instances even commercializing first outside the U.S., is the best use of our resources. This phenomenon has already occurred in medical devices as well, where we see U.S.-based medical devices companies often seeking a CE-mark designation in Europe before they attempt to get an approval through the FDA. In regulated industries, regulatory policy drives commercial decisions.


Q: You are working on treatments for UV-damaged and aging skin. Is this going to be a treatment that requires several injections or ongoing injections? I think the market would be huge for something that works without invasive surgery to restore a bit of youthfulness to wrinkled, old skin. Have investors been excited about these therapies as well? Should I invest? I notice RepliCel is trading publicly.
A: Our phase 1 dermatology trial is designed to give us a lot of quantitative biologic data about the effects (if any) on our injections into the extra-cellular matrix under the skin which is typically the target area for dermal fillers. This will be done with two different types of analysis, including measuring any difference in dermal thickness, in addition to measuring the effect on 10 different biomarkers associated in the published literature with aging and damaged skin. Additionally, we are studying whether or not these effects are different when we inject once, twice, or three times. This trial will arm us with significant biologic data to inform go/no-go decisions about whether or not we have something worth pursuing further. If, as we anticipate is possible, we are able to create a non-invasive, natural-based dermal filler with an aesthetically significant effect that lasts a meaningful period of time, we believe the appeal of this in the marketplace will be significant and potentially even larger than the current market for invasive procedures and current dermal fillers. The other comment I can make is that if we succeed in creating a cell-based dermal filler, we know there is a significant segment of the consumer base that will opt for such a natural-based treatment that would never otherwise opt for synthetic fillers or most cosmetic surgeries.

I’m always fascinated to observe which products we have in development resonate with different investors. There are those who discount our cell therapies almost entirely at this point and rest their valuation of our company on our next-generation dermal injector. Others love most the market size and potential of our cell-based dermatology program. We have a significant shareholder base who are investors almost exclusively because of the potential we represent to provide a better, cheaper, less invasive, and/or more widely available treatment for pattern baldness in men and women. Finally, the potential to regenerate damaged tendons of the ankle, knee, elbow, or shoulder with a simple injection of cells is exciting to a significant investor base that understands the potential for treating athletes, military personnel, and an aging population that are all keen to be as highly functional and pain-free as they can be.

RepliCel Life Sciences Inc. is publicly traded on the Toronto Venture Exchange under the symbol RP (or RP.V) and on the U.S. OTCQB under the symbol REPCF.


Q: Is Canada moving ahead more rapidly than the U.S. when it comes to stem cell research and clinical trials? Many Americans would flock to Canada to have treatment in my opinion if it was readily available there. It would be far easier than having to go to Japan for instance. Do you have plans to expand into therapies for chronic diseases?
A: There haven’t been enough cell therapy-related regulatory decisions in Canada to comfortably identify trends. There has not been any overt regulatory changes or rulings like was done in Japan to signal a clearly divergent pathway from that taken by other western regulatory agencies. However, of the handful of rulings we have seen to-date, there does seem to be an early indication that Health Canada may not be as conservative as the FDA. There are examples of them drawing the line - in their own risk-based analysis - in a slightly different place than has been done, or might have been done, by the FDA.

There have certainly been instances where products or treatments approved in Canada before the U.S. have proven what you suggest about American’s willingness to travel to Canada for access to medical care.

I suppose the answer to your last question depends on how one defines ‘chronic disease’. Certainly androgenic alopecia is a chronic, progressive condition and one that can attack patients even when they are young. I spoke recently to a middle-aged woman in Colorado who can remember her friends driving their toy cars down the strip of thin hair on top of her head. She has suffered from androgenic alopecia as long as she can remember. This is the condition being targeted by our RCH-01 product in tandem with Shiseido. Similarly, our RCT-01 product is targeting chronic Achilles tendinosis which again, by some definitions, may not qualify as a disease but certainly is a chronic condition that significantly impacts people’s lives and potentially their health if it impacts their ability to be physically active.

With our current pipeline of products we are clearly targeting conditions we can be commercially successful treating - predominantly without reimbursement - though with the treatment of tendinosis we are moving into an area where the pharmacoeconomics of getting someone back to work or off long-term disability will drive some reimbursement. As a company, we are excited about the opportunity to address significantly large clinical indications with easily defined endpoints which require relatively small and short-terms trials to drive products into the market earlier than might be possible with many or most indications. Should we meet with any measure of success in these efforts, we will be in a better position to explore the opportunity to leverage commercial success to develop products for a number of chronic conditions we have as targets for future development.